Core Viewpoint - Ford Motor Company warns that profits will significantly decline this year due to the increasing impact of tariffs imposed by President Trump, highlighting major policy shifts in Washington that are disrupting the global automotive industry [1] Tariff Impact - Ford expects adjusted EBIT to drop by up to 36% this year, primarily due to a net tariff impact of $2 billion, which is $500 million higher than previous estimates [1] - The increase in tariffs on steel and aluminum from 25% to 50% has raised costs for Ford, as material suppliers pass on these costs [2] - Ford's CFO indicated that the duration of high tariffs is longer than anticipated, affecting the company's cost structure [2] Competitive Landscape - The trade agreement between the Trump administration and Japan, reducing tariffs from 25% to 15%, gives competitors like Toyota a significant cost advantage over Ford [1] - Ford's production costs for models like the Escape and Bronco are approximately $5,000 and $10,000 higher, respectively, compared to similar models from Toyota [1][2] Financial Performance - Ford's Q2 earnings exceeded Wall Street expectations, with an EPS of $0.37 compared to the expected $0.33, and adjusted EBIT of $2.1 billion, above the anticipated $1.91 billion [3] - The company forecasts adjusted EBIT for the year to be between $6.5 billion and $7.5 billion, with free cash flow expected to be between $3.5 billion and $4.5 billion [3] Business Segments - Ford Blue, covering traditional internal combustion and hybrid vehicles, reported an EBIT of $661 million, down from $1.2 billion year-over-year [4] - The Ford Professional segment's EBIT was $2.3 billion, lower than the previous year's $2.6 billion [5] - The electric vehicle division, Model-e, incurred a loss of approximately $1.3 billion in Q2, exceeding last year's loss of $1.2 billion, with a projected total loss of up to $5.5 billion for the year [5] Future Strategies - Ford plans to announce an updated electric vehicle strategy on August 11, including details about a "breakthrough electric vehicle" [5] - The company sees significant opportunities in the autonomous taxi business, aiming to participate as a service provider in the expanding autonomous vehicle network [5]